Does the cost of managing owned PBX equipment outweigh the cloud based solution?

The choice of cloud based or premise based solutions for
most companies is often one of control versus economics. A premise based system
give the highest flexibility in configuration and administration, but for most
companies the cost of managing owned PBX equipment outweighs the cloud based
solution.

Costs versus Control over a PBX lifespan

Physical System or Cloud Installation

Configuration and Management

Software development

Maintenance

PBX Installs

While cloud solutions trump premise based PBX in the area
of installation, you need to be sure the associated recurring fees of your
cloud solution are included in your TCO over the period you plan to keep your
system. When comparing a premise based PBX, keep in mind the life span is likely
to be no more than five years- conversely a Hosted PBX solution is always up to
date.

Another risk with premise based solutions is the pre
install evaluation of your network. With a cloud solution, your provider is
more likely to have an experienced person evaluate your network quality to be
sure it can handle the solution. In house appraisals might miss bottlenecks or
performance stumbling blocks on your networks. Also, cloud solutions have less
on-site to go wrong and an inherent reduction of risk as a result.

Ease of Install- while a on-site PBX often requires a
forklift upgrade, hosted PBX allows for installations to occur a line at a time
in parallel with the existing system. this means that future additions and
changes can also be performed on a line basis without a truck roll or
associated disruption of business.

Configuration and Management

The cloud PBX shines in this realm as well with most
solutions providing administrative features matching and often exceeding
premise solutions. Features may be added on an ad-hoc basis often in seconds.
Managing upgrades is handled by the service provider who often will have many
years of experience in providing seamless changes and upgrade rollouts. Management
of your system as it expands is also handled by your cloud vendor- and those
often sporadic bursts in activity won't require a major change to accommodate- depending
on the vendor, you should be able to arrange to have a call overflow capacity on stand-by for much less than a
premise system deployment. Consider how often that last line or two in your
hunt group actually is used and you see cloud systems are on the plus here.

Software Development

Premise based PBX may have a suite of vendor apps ready
to go but many cloud deployments offer enterprise level applications with remarkable
flexibility for a fraction of the cost
of premise solutions as the development costs are shared amongst all users
rather than a hefty up-front application cost or the cost of hiring in-house
staff to write apps connect to an API.

PBX Maintenance

Saving the best for last- the higher reliability and
predictable costs of hosted PBX really show when maintenance comes into play,
but the lack of recurring costs on a premise solution seems an attractive
alternative.

With a cloud based Hosted PBX you know in advance what
expenses to expect- it's not as subject to unpredicted expenses as an on-site
solution.

Uptime of a cloud solution is improved as distributed
infrastructure and architecture allow for a rapid expediting of service issues.
Unlike a premise solution with repairs often requiring an on-site visit and the
associated delays, or a dedicated set of technicians on stand-by.

Maintenance costs for a hosted PBX are including in your
monthly product fees- there are no extra agreements to execute and hardware and
software upgrades are included and managed as part of the service subscription
itself and much more easily than any premise solution.

Which to choose?

Your choice in the end comes down to a variety of
requirements. For most small to medium businesses- Hosted PBX will make sense
and save money. Larger companies may require
the flexibility and control of premise based systems.

Have
you deployed a cloud or premise based PBX recently? What other concerns or
benefits would you share?

About the author: William
Laakkonen is a consultant for AVATAVA which first offered cloud services worldwide
in 2000. Among many solutions, AVATAVA offer hosted VoIP solutions for small
and medium enterprises across the US.